Question

A company announces a tender offer to its shareholders with the intent to buy a maximum of 1 million shares of its outstanding stock at $10 per share and sets no minimum number of shares to be purchased. An investor wants to participate in this offer and tenders his 1,000 share position. At the close of the offer period, only 900,000 shares have been tendered. How many, if any, of the investor's shares will the company purchase?

A) 0
B) 100
C) 900
D) 1,000

Answer 1

The company will purchase 1,000 shares from the investor.

Step-by-step explanation:

To determine how many shares the company will purchase from the investor, we need to compare the number of shares the investor is willing to tender with the number of shares the company wants to buy. In this case, the investor tenders 1,000 shares, but the company only wants to buy a maximum of 1 million shares. Since only 900,000 shares have been tendered, the company will be able to purchase all of the investor's shares. Therefore, the answer is D) 1,000.

Answer 2

The company will purchase C) 900 shares from the investor.

Step-by-step explanation:

A tender offer is a public solicitation by a company or an individual to purchase a significant amount of shares in a target company at a specified price. This voluntary action allows the acquirer to gain control, often influencing corporate decisions and restructuring. Shareholders decide whether to sell their shares.

To calculate the number of shares the company will purchase, we need to compare the number of shares the investor wants to tender with the maximum amount the company intends to buy. In this case, the investor has tendered 1,000 shares and the company intends to buy a maximum of 1 million shares. Since only 900,000 shares were tendered, the company will purchase all 900,000 shares. Therefore, the correct answer is C) 900.